http://www.falklands-oil.com/

http://www.rockhopperexploration.co.uk

http://www.argosresources.com/




Rockhopper was established in 2004 with a strategy to invest in and undertake an offshore oil exploration programme in the North Falkland Basin. It was floated on AIM in August 2005. Rockhopper was the first company to make a commercial oil discovery in the Falklands. Today Rockhopper is the largest acreage holder in the North Falkland Basin, with interests in the Greater Mediterranean region.

Halifax

Are you still holding PAL ? i see you started the thread for it.

ald reply on PAL thread, what will happen to RKH sp when they announce their share placing DES has already beaten them to the draw by all accounts.

sorry hali, but that is a surprisingly naive question from you ..... the one has little to do with the other ..... each placing, albeit that the companies are almost related, would be assessed on its individual merits

cynic no doubt but also the degree of dilution will be taken into account by all shareholders.

well yes, though DES finished effectively unchanged on the day ..... so what point are you trying to make, though i rather feel you are not enamoured with RKH to start with

cynic no doubt RKH has made a discovery which may prove to be commercial, the only downside has to be the cost of recovering the oil bearing in mind the huge investment required in this potential oil province. We would be more enthusiastic if some major oil companies started to take an active interest in the FI,we hope it doesn't turn out to be another south sea bubble!

ah well, you and your merry men have a low opinion of TLW too, the logic for which has even less foundation .... btw, unless i am even more stupid than usual, i think the RKH find has already been proven and accepted as being commercial ..... perhaps you should try tulip bulb futures!

cynic RKH think it has commerciality but has yet to be proven, keep up!

The next step for RKH is to organise the dates for appraisal wells to be sunk, close by or at a distance to find out the limits of the field. This probably won't happen until january or february at the earliest as Desire will want the rig for several wells in a row. Also the question of finance will come into the equation, do they have enough funds for the suite of the campaign ?.
A big boy coming in to help would not be a bad idea but unless a super deal for Rockhopper is on the cards, they probably at this moment in time would prefer to wait.
At the moment, my view is that it is fully valued but there are other prospects but like with all oil companies, it is hit and miss.....they have other prospects within their license, but will people want to lock in profits now ?, as to my mind : half a billion barrels is already in the sp.
It would take a field of several billion barrels to send this to 10 and upwards but much more drilling is required and one well with a flow of 2600 barrels or 4000 with the right equipment is not enough.

forgive me for asking RF, but haven't you been mis-calling this one for quite some time now? ..... i'm not entirely disputing your logic this time, but i guess that eventually you will have to be right about the stock being fully valued

If you read back to the almost start of this thread : I've been in since 30p or so....it is now 510p....misread it ?.....bought and sold a dozen times as it rises, making sure that if there was nothing I would not get my fingers burnt.....this is worth a heck of a lot on 2600 barrels per day !.....this is not Iraq stuff...where they have flows of 20000 or so....I'll jump in if i can see the positives....staying put is not my idea of a risk free run...

cynic is the find proven are you good at apologies?

i am very good at apologising as i have lots of practice ..... mea culpa, mea maxima culpa + 36 hail maries (marys?)

RF - in that case, to you too mea culpa etc etc .... i have also traded and held this one very successfully since marky showed me the light

I have not traded this one as its the way to lose profits, and so the traders have.

RF has called this one totally wrong all the way up from 60p onwards, however the "posts" might portray good trading but actually been caught out all the time and covers with a "I purchased at xxx price".

LOL.


This one is significantly undervalued on 242 million recoverable barrels....... thats worth 725p on an in the ground basis.

Upgrades will equal big target price hikes and big moves up.

You are a complete prat Prosels....where 's the 60p sprung from ?.....my trading is not perfect,,,far from it, but I've done well on this one, and I hate having to say that........how's Gulfkeystone getting on ?...oh ! I'm sorry ...you sold out at a loss...shame..(giggles....all round)...come on have a laugh....you blundered....those who boast like you always end up on the rubbish tip !...and I'm not a trader...just a small investor....

Mr P - you're a total ass .... a very basic truth - a profit is only a profit when banked .... it's fine being a smartarse after the event when you can gloat and say, "look how the price has continued on upwards" ..... when were you last honest enough to say, "whoops; gosh i'm a moron! i should have banked some profits while they were there."

oh dear oh dear - is RF letting the cat out of the bag about you and GKP?

Aren't we all making money, just some more than others!

Marunam1 that is a lot of ground to cover but taking your points in turn:

With regards to the test equipment, they state that it was not ideal, what are they missing ?. The test equipment was mobilized when Sealion was discovered, would they not have an idea of what was required, it seems strange to me that they "lacked" all the equipment, unless the OG is not specked enough to do extensive testing.

Remember this is a first ever test in a new hydrocarbon province being overseen by a novice operator, albeit with help from consultants. In these circumstances it is best to go with the simplest test arrangement and not plan on adding the complications associated with a down hole pump for example.

RKH would have been advised on predicted rates from the test assuming all the guns fired correctly and I suspect they believed the rate would be significantly higher than the actual 2000 bbl/d achieved from the Main Fan only.

At higher rates the fluids would have spent less time in the tubing due to the higher velocity. With less time to lose heat to the surroundings on the way to the surface, the point at which the fluid temperature dropped below the wax appearance temperature would have moved up the hole. It is likely therefore the test designer would have felt they were adequately protected with chemical injection at the subsea test tree. In other words they would not have planned for the additional complication of a chemical injection valve below the subsea test tree to mitigate the problem at 2000 bbl/d. Indeed had both fans been perforated and the well produced at 3000 bbl/d it is likely that wax deposition would have been far less problematic or absent.

They cut the test by 10 days or so , is that just that they wanted to prove to II's and themselves it will flow commercially, could they have gone back in and re done the test again?, would that really prove anything as they would have spent another say $10m or so doing it?


They achieved their objective of proving commerciality although perhaps not as convincingly as they would like to have done. They are unlikely to have known the guns failed until they had been retrieved at the end of the test and the RNS seems to confirm this. To retest they would have had run the risk that the perforations were damaged during the well killing operations required to bring the well under control and pull the tubing and test equipment out of the hole at the end of the first test. This would have reduced the rate attainable from the Main Fan and caused confusion as to what rate was being achieved from the Lower Fan.

A lot of oilies had stated that anything over 1000boep was a result from this Exploration well, surely2000bopd is a fantastic result, combined with the limited equipment they are stating.

The CPR report by RPS assumed a plateau rate of 61,000 bbl/d from 12 wells for the P50 development case and 165,000 bbl/d from 27 wells for the P10 development case. That is a nominal rate of 5,000 bbl/d and 6,000 bbl/d per well respectively. Allowing for rate decline due to water cut development and well down time etc., the actual assumption would have been at least 8,000 and 10,000 bbl/d initial production per well. That is a big stretch from a 1,000 bbl/d DST so 1,000 bbl/d would not have been encouraging. However 2,000 bbl/d was good and 3,000 bbl/d was even better and a great platform for extrapolating to 10,000 bbl/d from high angle or horizontal wells in more optimal positions.

"It should be noted that the flowing wellhead pressure was only 120 psia so there was little extra pressure draw down available by opening the choke." Could you try to explain that in layman's terms.

Yes apologies that was written in short hand.
When you turn on a tap in the kitchen water runs out and the more you open the tap the faster the water comes out. The choke is a piece of well test equipment that can be opened up a bit like a tap.

Sometimes on a hot summers day when you open the tap not much water comes out and the rate does not increase much as you open the tap further. This is because the mains pressure is low, everyone is watering their garden. (You get the same effect, low mains pressure, if the mains has burst in your vicinity and the water is pouring out into the road.) Think of the wellbore as the mains.

120 psia was a relatively low mains pressure. In an offshore development you would typically need at least that pressure available to process the crude through the topsides equipment. If the test crew had opened the tap (the choke) there was only a limited pressure reduction they could have achieved at the surface. This would have led to a limited pressure reduction down hole opposite the perforations and a limited increase between the pressure at the perforations and the reservoir pressure which is known as the pressure drawdown. Well rate is a function of pressure drawdown.

Hence the statement was saying there was not much additional production available from that well under DST conditions. They flowed it close to its maximum potential on the day.

"The absence of a statement about the test having a final pressure build up is concerning." - Did they not state that it was building up ?, I understand that it does not specify the pressure, but how long is a optimal time.?

They already know the reservoir pressure from the wireline MDT tool that was run during the logging suite. The first short flow rate and shut in would have established the reservoir pressure as measured by a different set of pressure gauges. In absolute terms it should be very close to the MDT pressures when extrapolated to the same depth. The statement that the pressure was still building up is not significant. It is just saying there will be a minor correction (increase) that will be applied to get the final stabilised pressure. A much larger correction will be applied to translate the pressure at gauge depth to the reservoir pressure to allow for the column of oil below the gauges.

My statement about the final pressure build up referred to the build up of pressure that would have taken place once the well had been shut in at the end of 18 hours flow and after the withdrawal of about 1500 bbl oil from the reservoir. The pressure builds up (recovers) from the flowing bottom hole pressure towards the initial reservoir pressure.

It is the analysis of that pressure build up that can provide good estimates of reservoir permeability which is so important in understanding future production well deliverability. They probably omitted the statement because most city types would not understand the significance and RKH management have limited DST experience themselves.

A bit clearer now I trust.

Cheers,

cynic, GKP I purchased it at a tad over 70p and sold it for a tad under 70p. It was not performing so I dumped it and put it into DES at 100p levels.

Since selling GKP I have no need to post on the thread any more, or any need to read it, I have sold.

Was it a mistake ? Well, GKP has doubled and DES has gone up 60%..... so at this moment in time I have only not gained as much, however, should Rachel strike oil and the DES price multibags I shall be able to post all over the GKP thread how this was the best thing I ever did selling GKP :)

Swings and roundabouts........ how do you want to spin your poor trading today ? ;)